BLADEX, INC. — 2022 Form 20-F Summary
Business context and reporting period
Banco Latinoamericano de Comercio Exterior, S.A. (Bladex; NYSE: BLX) is a Panama-based specialized bank financing trade and regional integration in Latin America and the Caribbean. It serves financial institutions, corporations and investors, and does not take retail deposits. This is the audited annual report for the fiscal year ended December 31, 2022, prepared under IFRS as issued by the IASB—not a standalone fourth-quarter report. The filing text does not provide a clear set of Q4-only results.
Financial performance and position
Amounts below are U.S. dollars; millions unless noted.
| Metric | 2022 | 2021 |
|---|---|---|
| Total revenues | $166.7 | $104.2 |
| Net interest income | $148.0 | $86.8 |
| Profit for the year | $92.0 | $62.7 |
| Basic/diluted EPS | $2.54 | $1.62 |
| Provision for credit losses | $19.5 | $2.3 |
| Operating expenses | $55.1 | $39.9 |
| Net interest margin / spread | 1.71% / 1.39% | 1.32% / 1.15% |
| Return on average equity / assets | 8.95% / 1.03% | 6.10% / 0.93% |
| Efficiency ratio | 33.1% | 38.3% |
- Revenue rose 60% and profit rose 47%. Higher market rates, improved lending spreads and larger average credit balances drove net interest income up 71%; fee income also increased 8%, to $19.8 million.
- Credit costs increased sharply, reflecting portfolio growth and larger individual provisions for Stage 3 exposures. The year-end allowance for expected credit losses was $66.8 million, or 0.77% of the $8.726 billion Credit Portfolio, versus $47.1 million, or 0.64%, a year earlier.
- Total assets were $9.284 billion, up 15%; total liabilities were $8.215 billion, up 17%; and equity was $1.069 billion, up 8%. The Loan Portfolio was $6.763 billion, up 18%, and the Commercial Portfolio was $7.706 billion, up 18%.
- Deposits totaled $3.205 billion, up 6%. Borrowings and debt, net, were $4.417 billion, up 34%; repurchase agreements were $300 million, down from $427 million. Funding costs rose to 2.39% from 0.96% as rates increased.
- Liquid assets were $1.269 billion, down from $1.405 billion; liquid assets were 13.67% of total assets and 39.77% of deposits. The regulatory Liquidity Coverage Ratio was 167.46%, above the 100% minimum.
- Capital ratios declined as the balance sheet expanded: Basel III Tier 1 (IRB) was 15.3%, versus 19.1%; Panama regulatory capital adequacy was 13.21%, versus 15.57%. Equity-to-assets was 11.52%. The Bank reported compliance with applicable capital requirements.
- Operating cash flow was negative $769.7 million, mainly reflecting $1.054 billion of loan growth, partly offset by increased deposits. Investing cash flow was negative $166.7 million and financing cash flow positive $916.2 million. Cash and cash equivalents ended at $1.191 billion.
- Declared regular dividends were $1.00 per share for 2022; $36.3 million was declared and $36.1 million paid. No special dividend was declared.
Material changes versus the prior year
- Profit increased by $29.3 million, despite much higher credit-loss provisions and a 38% rise in operating expenses. Expense growth reflected added staff, a new performance-based compensation policy and strategy-related process and technology work.
- Credit-impaired loans rose to $30 million from $11 million; impaired credits, including $5 million of securities, totaled $35 million. The exposures related to two borrowers, with $25.5 million of individually assigned loan-loss allowances reported for them.
- The Investment Portfolio increased to $1.020 billion from $825 million, primarily through securities purchases at amortized cost. Of these securities, $300 million carrying value was pledged for repurchase transactions.
- Funding mix shifted toward borrowings and debt as deposit funding’s share of total liabilities fell to 39% from 43%. Central banks or their designees supplied 45% of deposits; the five largest depositors represented 38%.
- Other comprehensive income was positive $19.7 million, compared with a loss of $11.8 million in 2021, bringing year-end accumulated OCI to positive $8.1 million.
Outlook, management commentary and risks
Management’s 2022–2026 strategic plan emphasizes strengthening the business model, broadening the client and product base, improving credit origination and service, and modernizing technology and processes. The Bank intends to grow trade and related financing while diversifying exposures and maintaining its focus on selected regional clients. No specific numerical earnings or portfolio guidance is provided.
Management described regional activity as positive overall in 2022, but identified downside risks from persistent inflation, high interest rates, slower global growth or recession, commodity-price volatility, currency depreciation, trade and supply-chain disruption, and political or geopolitical developments. Other material risks include concentrated regional and depositor exposures, borrower credit deterioration, liquidity and funding costs, interest-rate and benchmark transition risk, operational and cyber risk, sanctions and compliance obligations, and natural disasters. Moody’s affirmed Baa2/P-2 but revised the outlook to negative; S&P and Fitch affirmed investment-grade ratings with stable outlooks.
The Bank reported that it was completing USD LIBOR contract transitions, with all bond and debt contracts updated and remaining contract work targeted before June 30, 2023. KPMG issued an unqualified opinion on the IFRS financial statements and an unqualified opinion on internal control over financial reporting; the allowance for loan losses was identified as a critical audit matter. The filing reports no significant litigation and no defaults or dividend arrearages.
Investor verification priorities
- Confirm the Q4-only earnings and cash-flow figures from the separate quarterly release; this annual filing does not clearly provide them.
- Review the $19.5 million credit-loss charge, the two Stage 3 borrower exposures, collateral/recovery assumptions and the adequacy of the $66.8 million allowance.
- Assess the sustainability of earnings if market rates fall or funding costs continue to rise, and compare loan yields with the cost and maturity of deposits and borrowings.
- Check deposit concentration, uninsured funding, liquidity buffers and the reported LCR; reconcile the filing’s differing demand/overnight deposit figures and descriptions of immediately callable deposits.
- Track capital-ratio declines, portfolio and country concentrations, Moody’s negative outlook, and remaining LIBOR transition exposures.